USDA Issues WASDE Report for August – All Milk Price Estimate for 2022 Lowered to $25.20

 

USDA issued its World Agricultural Supply and Demand Estimates on August 12. The milk production forecasts for 2022 and 2023 are raised from last month. The cow inventory is raised in both years based on the July 1 dairy cow inventory provided in the recent Cattle report. Output-per-cow is forecast to increase at a slightly more rapid pace in 2022 and the 2023 forecast is raised as well.

Based on recent trade data, fat basis imports for 2022 are lowered from last month, but skim solids basis imports are unchanged. Imports for 2023 are lowered reflecting larger domestic supplies. Exports on both a skim-solids basis and on a fat basis are raised for 2022 on recent data and expectations of larger available supplies. Export forecasts for 2023 on both fat and skim-solids bases are raised from last month on larger expected supplies.

Forecasts for 2022 butter prices are raised slightly from last month on current price strength, but the 2022 cheese price is forecast lower with expectations of larger supplies and continued large stocks. The forecasts for nonfat dry milk (NDM) and whey prices are also lower on observed prices and expected supplies. The Class III price is lowered on both lower cheese and whey prices, and the Class IV price lowered as the higher butter price is more than offset by the lower NDM price. The all milk price for 2022 is lowered to $25.20 per cwt. For 2023, forecasts for cheese, butter, NDM, and whey are all lowered on expectations of greater supplies and strong competition in international markets. With lower product prices, the Class III and Class IV price forecasts are lowered. The 2023 all milk price forecast is lowered to $22.50 per cwt.